What the Latest IRS Changes Mean for Your 2025 Tax Return

Every year the IRS adjusts tax brackets, contribution limits, and standard deductions for inflation. For 2025, several key changes could meaningfully affect how much you owe — or how much you get back. Here's what you need to know.

Updated Tax Brackets for 2025

The IRS has adjusted all seven tax brackets upward for inflation. Here are the key thresholds for single filers:

• 10%: Up to $11,925
• 12%: $11,926 – $48,475
• 22%: $48,476 – $103,350
• 24%: $103,351 – $197,300
• 32%: $197,301 – $250,525
• 35%: $250,526 – $626,350
• 37%: Over $626,350

Higher Standard Deduction

The standard deduction increased again for 2025:

• Single filers: $15,000 (up from $14,600)
• Married filing jointly: $30,000 (up from $29,200)
• Head of household: $22,500 (up from $21,900)

For most taxpayers, the standard deduction is still larger than itemized deductions. If you're not sure which benefits you more, our team can run the numbers for you.

Retirement Contribution Limits

Maximize your tax-advantaged savings with the updated limits:

• 401(k), 403(b), 457: $23,500 employee contribution limit
• IRA (Traditional & Roth): $7,000 ($8,000 if age 50+)
• HSA (self-only coverage): $4,300
• HSA (family coverage): $8,550

Capital Gains Tax Thresholds

Long-term capital gains rates for 2025 (single filers):

• 0%: Up to $48,350
• 15%: $48,351 – $533,400
• 20%: Over $533,400

Child Tax Credit

The Child Tax Credit remains $2,000 per qualifying child under 17, with up to $1,700 refundable. Income phase-out begins at $200,000 for single filers and $400,000 for married filing jointly.

Earned Income Tax Credit (EITC)

Maximum EITC for 2025 increased to:

• No children: $649
• 1 child: $4,328
• 2 children: $7,152
• 3+ children: $8,046

1099-K Reporting Threshold

The IRS is phasing in new reporting requirements for payment platforms (Venmo, PayPal, Cash App). For 2025, the threshold is $2,500 — meaning you'll receive a 1099-K if you receive more than $2,500 through these platforms for goods or services.